Swedish trade policy and its economic impact (1873–1913)

Szabó, Gyula (2024) Swedish trade policy and its economic impact (1873–1913). ECONOMY AND FINANCE: ENGLISH-LANGUAGE EDITION OF GAZDASÁG ÉS PÉNZÜGY, 11 (4). pp. 419-452. ISSN 2415-9379

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Abstract

Protectionism and the debate surrounding it have a long history. The phenomenon can be better understood by examining a past era characterized by sharp‘turnarounds’ in trade policy practices. For that purpose we have examined Sweden at the turn of the 19th and 20th centuries. The focus of our research wasprimarily on uncovering the driving forces behind the economic policy practicethat broke with free trade, as well as presenting its impacts on the economy, whichwe aimed to do by relying on the available historical sources. We also soughtto answer the question of whether the Swedish protectionist experiment can beconsidered a model to follow in present times. In summary of our findings, it canbe concluded that the impact of tariff increases primarily affected the structureof imports, rather than their volume. Although the increase in tariffs affected theoverall price level, there were certain products whose prices were more significantly impacted by global market trends. While the measures proved ineffectivein achieving a lasting improvement in the balance of trade, they provided significant additional revenue for the state budget. The process of industrialisation wasnot interrupted by import restrictions; in fact, there are examples of successfulimport substitution. In terms of economic convergence with the European corecountries, the protectionist period proved to be more successful than the decades of free trade. Despite its relative success, we cannot consider Sweden’s tradepolicy of the late 19th century as a model to follow today, because its results wereachieved under the unique conditions of a specific historical era.

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